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Why 0% financing from retailers can be a bad deal

2 balances can add complications
2 balances can add complications | AtomicImagery/DigitalVision/Getty Images

2 balances can add complications

Sometimes, credit cards will allow you to carry 2 balances -- one for the purchases on which you have the deferred-interest arrangement, and one for purchases you make later.

What you might not know: Credit card issuers are required, unless you state otherwise, to put anything above the minimum toward the balance without the deferred-interest arrangement, says Wu. The only exception: During the last 2 months of the deferred-interest period, card issuers have to direct anything above your minimum to the deferred-interest balance, she says.

You only have a set amount of time to pay off your deferred-interest balance. If your payments are going toward the other balance, you're not making any headway.

The CPFB found that even consumers with good credit scores who carry multiple balances pay off their deferred-interest balance on schedule just 63% of the time.

One solution: Don't run 2 balances when making use of 0% financing. Until you pay off the deferred-interest balance, don't add to the confusion (and debt) by making more charges. Use a different payment method for new purchases.

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Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

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